Telefonica (NYSE:TEF)
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3 Years : From May 2010 to May 2013
 Spanish telecoms giant Telefonica SA (TEF) said Friday its first-quarter net profit dropped 1.9%, missing analysts' expectations, because of lower margins and surging operating expenses.
Madrid-based Telefonica, Europe's second-largest telecommunications company by market value after U.K.-based Vodafone Group PLC (VOD.LN), said net profit fell to EUR1.62 billion from EUR1.66 billion in the same period last year. A Dow Jones Newswires survey of six analysts had anticipated a EUR1.72 billion net profit.
Operating expenses rose 13% to EUR10.18 billion, with personnel expenses also up 13%.
Telefonica said revenue rose 11% to EUR15.44 billion, slightly below expectations, with the company's Spanish division--still its largest by sales--posting a 5.6% decrease. This was offset by a 26% jump in revenue from Telefonica's Latin American division, flattered by the full consolidation of Brazilian mobile-phone provider Vivo Participaceos SA (VIV, VIVO4.BR), which it took over last year in a complex deal with former partner Portugal Telecom (PT).
Meanwhile, operating income before depreciation and amortization increased 9% to EUR5.57 billion during the same period. Telefonica's Oibda margin, its most closely watched performance measure, fell to 36.1% from 36.7%.
Telefonica shares closed Thursday at EUR16.97, and have been one of the worst performers in Spain's blue-chip IBEX-35 index since January, rising 4.4% compared with a 6.4% rise in the index. This is partly a consequence of Telefonica's poor results for the fourth quarter last year, which also showed higher expenses and margins under pressure.
-By David Roman, Dow Jones Newswires; +34 91 395 8127; david.roman@dowjones.com
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